Broadcom Ltd

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AVGO : NASDAQ : Technology
$179.09 | %
Today's Range: 176.9 - 181.9
Avg. Daily Volume: 2631700.0
12/09/16 - 4:00 PM ET

Financial Analysis


BROADCOM LTD's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. BROADCOM LTD has strong liquidity. Currently, the Quick Ratio is 1.71 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 300.76% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)4136.01840.0
EBITDA ($mil)1621.0793.0
EBIT ($mil)921.0543.0
Net Income ($mil)-632.0429.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)3097.01843.0
Total Assets ($mil)49966.010592.0
Total Debt ($mil)13642.03949.0
Equity ($mil)18892.04714.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin63.364.51
EBITDA Margin39.1943.09
Operating Margin22.2729.51
Sales Turnover0.260.64
Return on Assets-3.4812.87
Return on Equity-8.6129.5
Debt Q4 FY16 Q4 FY15
Current Ratio2.313.37
Debt/Capital0.420.46
Interest Expense106.041.0
Interest Coverage8.6913.24


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)396.44276.26
Div / share0.510.42
EPS-1.441.64
Book value / share47.6517.06
Institutional Own % n/a n/a
Avg Daily Volume2659233.02535235.0

Valuation


HOLD. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. To use another comparison, its price-to-book ratio of 3.58 indicates a premium versus the S&P 500 average of 2.86 and a discount versus the industry average of 4.35. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. The valuation analysis reveals that, BROADCOM LTD seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AVGO NM Peers 31.29   AVGO 19.84 Peers 18.39

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

AVGO's P/E is negative making this valuation measure meaningless.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AVGO is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AVGO 11.67 Peers 18.56   AVGO NA Peers 2.04

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

AVGO is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AVGO 3.58 Peers 4.35   AVGO -177.34 Peers 17.88

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AVGO is trading at a discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AVGO is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AVGO 5.11 Peers 4.52   AVGO 94.02 Peers 12.30

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AVGO is trading at a premium to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

AVGO has a sales growth rate that significantly exceeds its peers.

 

 

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